Evolution of co-operatives in India

Highlights and Milestones

1.The Cooperatives were first started in Europe to serve the credit-starved people in Europe as a self-reliant, self-managed people’s movement with no role for the Government.2.British India replicated the Raiffeisen-type cooperative movement in India to mitigate the miseries of the poor farmers, particularly harassment by moneylenders.3.The first credit cooperative society was formed in Banking in the year 1903 with the support of Government of Bengal. It was registered under the Friendly Societies Act of the British Government.4.Cooperative Credit Societies Act of India was enacted on 25th March 1904.5.Cooperation became a State subject in 1919. In 1951, 501 Central Cooperative Unions were renamed as Central Cooperative Banks.6.Land Mortgage Cooperative Banks were established in 1938 to provide loans initially for debt relief and land improvement.7.Cooperatives have played an important role in the liberation and development of our country.8.The word Cooperative has become synonymous for dedicated and efficient management of rural credit system.9.Reserve Bank of India started refinancing cooperatives for Seasonal Agricultural Operations from 1939.10.From 1948, Reserve Bank started refinancing State Cooperative Banks for meeting the credit needs of Central Cooperative Banks and through them the Primary Agricultural Cooperative Societies.11.Only 3% of rural families availed farm credit in 1951.12.In 1954, the All India Rural Credit Survey Committee recommended strengthening of DCC Banks and PACS with State partnership and patronage to solve the farmers’ woes.13.Registrar of Cooperative Societies became the custodian of Cooperatives from 1962 with the enactment of respective State Acts.14.Reserve Bank introduced Seasonality and Scale of Finance for crop loans and provided for conversion, rephasement and reschedulement to tide over crop loss due to calamities.15.The Primary Agricultural Cooperative Societies became multi purpose.16.Reorganization of PACS into viable units, FSCS, LAMPS started under action programme of RBI in 1964.17.The finding of All India Rural Credit Review Committee that coverage of cooperatives is limited to hardly 30% of farmers led to nationalization of Banks. However, Cooperatives have played a key role in meeting the credit needs of weaker sections of farmers.18.The establishment of Regional Rural Banks from 1975 has not reduced the problems of rural credit as they reached only 6% of the farmers.19.Cooperatives have contributed their part in the implementation of 20-point programme and Integrated Rural Development Programme.20.Though the Cooperatives were lagging behind in rural credit till 1991, they regained their prime place with 62% share in rural crop loans between 1991 and 2001.